[Senate Report 107-59]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 148
107th Congress                                                   Report
                                 SENATE
 1st Session                                                     107-59

======================================================================



 
        UNITED STATES-JORDAN FREE TRADE AREA IMPLEMENTATION ACT

                                _______
                                

               September 4, 2001.--Ordered to be printed

                                _______
                                

   Mr. Baucus, from the Committee on Finance, submitted the following

                              R E P O R T

                         [To accompany S. 643]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Finance, having considered legislation (S. 
643) to implement the agreement establishing a United States-
Jordan free trade area, reports favorably thereon with an 
amendment and refers the bill as amended to the full Senate 
with a recommendation that the bill do pass.
    The amendment is as follows:
    Strike out all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``United States-Jordan Free Trade Area 
Implementation Act''.

SEC. 2. PURPOSES.

  The purposes of this Act are--
          (1) to implement the agreement between the United States and 
        Jordan establishing a free trade area;
          (2) to strengthen and develop the economic relations between 
        the United States and Jordan for their mutual benefit; and
          (3) to establish free trade between the 2 nations through the 
        removal of trade barriers.

SEC. 3. DEFINITIONS.

  For purposes of this Act:
          (1) Agreement.--The term ``Agreement'' means the Agreement 
        between the United States of America and the Hashemite Kingdom 
        of Jordan on the Establishment of a Free Trade Area, entered 
        into on October 24, 2000.
          (2) HTS.--The term ``HTS'' means the Harmonized Tariff 
        Schedule of the United States.

SEC. 4. APPROVAL OF AGREEMENT.

  Congress approves the Agreement between the United States of America 
and the Hashemite Kingdom of Jordan on the establishment of a free 
trade area, entered into on October 24, 2000, and submitted to Congress 
on January 6, 2001.

             TITLE I--TARIFF MODIFICATIONS; RULES OF ORIGIN

SEC. 101. TARIFF MODIFICATIONS.

  (a) Tariff Modifications Provided for in the Agreement.--The 
President may proclaim--
          (1) such modifications or continuation of any duty,
          (2) such continuation of duty-free or excise treatment, or
          (3) such additional duties,
as the President determines to be necessary or appropriate to carry out 
article 2.1 of the Agreement and the schedule of duty reductions with 
respect to Jordan set out in Annex 2.1 of the Agreement.
  (b) Other Tariff Modifications.--The President may proclaim--
          (1) such modifications or continuation of any duty,
          (2) such continuation of duty-free or excise treatment, or
          (3) such additional duties,
as the President determines to be necessary or appropriate to maintain 
the general level of reciprocal and mutually advantageous concessions 
with respect to Jordan provided for by the Agreement.

SEC. 102. RULES OF ORIGIN.

  (a) In General.--
          (1) Eligible articles.--
                  (A) In general.--The reduction or elimination of any 
                duty imposed on any article by the United States 
                provided for in the Agreement shall apply only if--
                          (i) that article is imported directly from 
                        Jordan into the customs territory of the United 
                        States; and
                          (ii) that article--
                                  (I) is wholly the growth, product, or 
                                manufacture of Jordan; or
                                  (II) is a new or different article of 
                                commerce that has been grown, produced, 
                                or manufactured in Jordan and meets the 
                                requirements of subparagraph (B).
                  (B) Requirements.--
                          (i) General rule.--The requirements of this 
                        subparagraph are that with respect to an 
                        article described in subparagraph (A)(ii)(II), 
                        the sum of--
                                  (I) the cost or value of the 
                                materials produced in Jordan, plus
                                  (II) the direct costs of processing 
                                operations performed in Jordan,
                        is not less than 35 percent of the appraised 
                        value of such article at the time it is 
                        entered.
                          (ii) Materials produced in united states.--If 
                        the cost or value of materials produced in the 
                        customs territory of the United States is 
                        included with respect to an article to which 
                        this paragraph applies, an amount not to exceed 
                        15 percent of the appraised value of the 
                        article at the time it is entered that is 
                        attributable to such United States cost or 
                        value may be applied toward determining the 
                        percentage referred to in clause (i).
          (2) Exclusions.--No article may be considered to meet the 
        requirements of paragraph (1)(A) by virtue of having merely 
        undergone--
                  (A) simple combining or packaging operations; or
                  (B) mere dilution with water or mere dilution with 
                another substance that does not materially alter the 
                characteristics of the article.
  (b) Direct Costs of Processing Operations.--
          (1) In general.--As used in this section, the term ``direct 
        costs of processing operations'' includes, but is not limited 
        to--
                  (A) all actual labor costs involved in the growth, 
                production, manufacture, or assembly of the specific 
                merchandise, including fringe benefits, on-the-job 
                training, and the cost of engineering, supervisory, 
                quality control, and similar personnel; and
                  (B) dies, molds, tooling, and depreciation on 
                machinery and equipment which are allocable to the 
                specific merchandise.
          (2) Excluded costs.--The term ``direct costs of processing 
        operations'' does not include costs which are not directly 
        attributable to the merchandise concerned, or are not costs of 
        manufacturing the product, such as--
                  (A) profit; and
                  (B) general expenses of doing business which are 
                either not allocable to the specific merchandise or are 
                not related to the growth, production, manufacture, or 
                assembly of the merchandise, such as administrative 
                salaries, casualty and liability insurance, 
                advertising, and salesmen's salaries, commissions, or 
                expenses.
  (c) Textile and Apparel Articles.--
          (1) In general.--A textile or apparel article imported 
        directly from Jordan into the customs territory of the United 
        States shall be considered to meet the requirements of 
        paragraph (1)(A) of subsection (a) only if--
                  (A) the article is wholly obtained or produced in 
                Jordan;
                  (B) the article is a yarn, thread, twine, cordage, 
                rope, cable, or braiding, and--
                          (i) the constituent staple fibers are spun in 
                        Jordan, or
                          (ii) the continuous filament is extruded in 
                        Jordan;
                  (C) the article is a fabric, including a fabric 
                classified under chapter 59 of the HTS, and the 
                constituent fibers, filaments, or yarns are woven, 
                knitted, needled, tufted, felted, entangled, or 
                transformed by any other fabric-making process in 
                Jordan; or
                  (D) the article is any other textile or apparel 
                article that is wholly assembled in Jordan from its 
                component pieces.
          (2) Definition.--For purposes of paragraph (1), an article is 
        ``wholly obtained or produced in Jordan'' if it is wholly the 
        growth, product, or manufacture of Jordan.
          (3) Special rules.--
                  (A) Certain made-up articles, textile articles in the 
                piece, and certain other textiles and textile 
                articles.--Notwithstanding paragraph (1)(D) and except 
                as provided in subparagraphs (C) and (D) of this 
                paragraph, subparagraph (A), (B), or (C) of paragraph 
                (1), as appropriate, shall determine whether a good 
                that is classified under one of the following headings 
                or subheadings of the HTS shall be considered to meet 
                the requirements of paragraph (1)(A) of subsection (a): 
                5609, 5807, 5811, 6209.20.50.40, 6213, 6214, 6301, 
                6302, 6304, 6305, 6306, 6307.10, 6307.90, 6308, and 
                9404.90.
                  (B) Certain knit-to-shape textiles and textile 
                articles.--Notwithstanding paragraph (1)(D) and except 
                as provided in subparagraphs (C) and (D) of this 
                paragraph, a textile or apparel article which is knit-
                to-shape in Jordan shall be considered to meet the 
                requirements of paragraph (1)(A) of subsection (a).
                  (C) Certain dyed and printed textiles and textile 
                articles.--Notwithstanding paragraph (1)(D), a good 
                classified under subheading 6117.10, 6213.00, 6214.00. 
                6302.22,6302.29, 6302.52, 6302.53, 6302.59, 6302.92, 
6302.93, 6302.99, 6303.92, 6303.99, 6304.19, 6304.93, 6304.99, 
9404.90.85, or 9404.90.95 of the HTS, except for a good classified 
under any such subheading as of cotton or of wool or consisting of 
fiber blends containing 16 percent or more by weight of cotton, shall 
be considered to meet the requirements of paragraph (1)(A) of 
subsection (a) if the fabric in the good is both dyed and printed in 
Jordan, and such dyeing and printing is accompanied by 2 or more of the 
following finishing operations: bleaching, shrinking, fulling, napping, 
decating, permanent stiffening, weighting, permanent embossing, or 
moireing.
                  (D) Fabrics of silk, cotton, manmade fiber or 
                vegetable fiber.--Notwithstanding paragraph (1)(C), a 
                fabric classified under the HTS as of silk, cotton, 
                man-made fiber, or vegetable fiber shall be considered 
                to meet the requirements of paragraph (1)(A) of 
                subsection (a) if the fabric is both dyed and printed 
                in Jordan, and such dyeing and printing is accompanied 
                by 2 or more of the following finishing operations: 
                bleaching, shrinking, fulling, napping, decating, 
                permanent stiffening, weighting, permanent embossing, 
                or moireing.
          (4) Multicountry rule.--If the origin of a textile or apparel 
        article cannot be determined under paragraph (1) or (3), then 
        that article shall be considered to meet the requirements of 
        paragraph (1)(A) of subsection (a) if--
                  (A) the most important assembly or manufacturing 
                process occurs in Jordan; or
                  (B) if the applicability of paragraph (1)(A) of 
                subsection (a) cannot be determined under subparagraph 
                (A), the last important assembly or manufacturing 
                occurs in Jordan.
  (d) Exclusion.--A good shall not be considered to meet the 
requirements of paragraph (1)(A) of subsection (a) if the good--
          (1) is imported into Jordan, and, at the time of importation, 
        would be classified under heading 0805 of the HTS; and
          (2) is processed in Jordan into a good classified under any 
        of subheadings 2009.11 through 2009.30 of the HTS.
  (e) Regulations.--The Secretary of the Treasury, after consultation 
with the United States Trade Representative, shall prescribe such 
regulations as may be necessary to carry out this section.

                     TITLE II--RELIEF FROM IMPORTS

                     Subtitle A--General Provisions

SEC. 201. DEFINITIONS.

  As used in this title:
          (1) Commission.--The term ``Commission'' means the United 
        States International Trade Commission.
          (2) Jordanian article.--The term ``Jordanian article'' means 
        an article that qualifies for reduction or elimination of a 
        duty under section 102.

     Subtitle B--Relief From Imports Benefiting From The Agreement

SEC. 211. COMMENCING OF ACTION FOR RELIEF.

  (a) Filing of Petition.--
          (1) In general.--A petition requesting action under this 
        subtitle for the purpose of adjusting to the obligations of the 
        United States under the Agreement may be filed with the 
        Commission by an entity, including a trade association, firm, 
        certified or recognized union, or group of workers that is 
        representative of an industry. The Commission shall transmit a 
        copy of any petition filed under this subsection to the United 
        States Trade Representative.
          (2) Provisional relief.--An entity filing a petition under 
        this subsection may request that provisional relief be provided 
        as if the petition had been filed under section 202(a) of the 
        Trade Act of 1974.
          (3) Critical circumstances.--Any allegation that critical 
        circumstances exist shall be included in the petition.
  (b) Investigation and Determination.--
          (1) In general.--Upon the filing of a petition under 
        subsection (a), the Commission, unless subsection (d) applies, 
        shall promptly initiate an investigation to determine whether, 
        as a result of the reduction or elimination of a duty provided 
        for under the Agreement, a Jordanian article is being imported 
        into the United States in such increased quantities, in 
        absolute terms or relative to domestic production, and under 
        such conditions that imports of the Jordanian article alone 
        constitute a substantial cause of serious injury or threat 
        thereof to the domestic industry producing an article that is 
        like, or directly competitive with, the imported article.
          (2) Causation.--For purposes of this subtitle, a Jordanian 
        article is being imported into the UnitedStates in increased 
quantities as a result of the reduction or elimination of a duty 
provided for under the Agreement if the reduction or elimination is a 
cause that contributes significantly to the increase in imports. Such 
cause need not be equal to or greater than any other cause.
  (c) Applicable Provisions.--The following provisions of section 202 
of the Trade Act of 1974 (19 U.S.C. 2252) apply with respect to any 
investigation initiated under subsection (b):
          (1) Paragraphs (1)(B) and (3) of subsection (b).
          (2) Subsection (c).
          (3) Subsection (d).
  (d) Articles Exempt From Investigation.--No investigation may be 
initiated under this section with respect to any Jordanian article if 
import relief has been provided under this subtitle with respect to 
that article.

SEC. 212. COMMISSION ACTION ON PETITION.

  (a) Determination.--By no later than 120 days (180 days if critical 
circumstances have been alleged) after the date on which an 
investigation is initiated under section 211(b) with respect to a 
petition, the Commission shall make the determination required under 
that section.
  (b) Additional Finding and Recommendation if Determination 
Affirmative.--If the determination made by the Commission under 
subsection (a) with respect to imports of an article is affirmative, 
the Commission shall find, and recommend to the President in the report 
required under subsection (c), the amount of import relief that is 
necessary to remedy or prevent the injury found by the Commission in 
the determination and to facilitate the efforts of the domestic 
industry to make a positive adjustment to import competition. The 
import relief recommended by the Commission under this subsection shall 
be limited to that described in section 213(c).
  (c) Report to President.--Not later than the date that is 30 days 
after the date on which a determination is made under subsection (a) 
with respect to an investigation, the Commission shall submit to the 
President a report that shall include--
          (1) a statement of the basis for the determination;
          (2) dissenting and separate views; and
          (3) any finding made under subsection (b) regarding import 
        relief.
  (d) Public Notice.--Upon submitting a report to the President under 
subsection (c), the Commission shall promptly make public such report 
(with the exception of information which the Commission determines to 
be confidential) and shall cause a summary thereof to be published in 
the Federal Register.
  (e) Applicable Provisions.--For purposes of this subtitle, the 
provisions of paragraphs (1), (2), and (3) of section 330(d) of the 
Tariff Act of 1930 (19 U.S.C. 1330(d)) shall apply with respect to 
determinations and findings made under this section as if such 
determinations and findings were made under section 202 of the Trade 
Act of 1974 (19 U.S.C. 2252).

SEC. 213. PROVISION OF RELIEF.

  (a) In General.--Not later than the date that is 30 days after the 
date on which the President receives the report of the Commission 
containing an affirmative determination of the Commission under section 
212(a), the President shall provide relief from imports of the article 
that is the subject of such determination to the extent that the 
President determines necessary to prevent or remedy the injury found by 
the Commission and to facilitate the efforts of the domestic industry 
to make a positive adjustment to import competition, unless the 
President determines that the provision of such relief is not in the 
national economic interest of the United States or, in extraordinary 
circumstances, that the provision of such relief would cause serious 
harm to the national security of the United States.
  (b) National Economic Interest.--The President may determine under 
subsection (a) that providing import relief is not in the national 
economic interest of the United States only if the President finds that 
taking such action would have an adverse impact on the United States 
economy clearly greater than the benefits of taking such action.
  (c) Nature of Relief.--The import relief (including provisional 
relief) that the President is authorized to provide under this subtitle 
with respect to imports of an article is--
          (1) the suspension of any further reduction provided for 
        under the United States Schedule to Annex 2.1 of the Agreement 
        in the duty imposed on that article;
          (2) an increase in the rate of duty imposed on such article 
        to a level that does not exceed the lesser of--
                  (A) the column 1 general rate of duty imposed under 
                the HTS on like articles at the time the import relief 
                is provided; or
                  (B) the column 1 general rate of duty imposed under 
                the HTS on like articles on the day before the date on 
                which the Agreement enters into force; or
          (3) in the case of a duty applied on a seasonal basis to that 
        article, an increase in the rate of duty imposed on the article 
        to a level that does not exceed the column 1 general rate of 
        duty imposed under the HTS on the article for the corresponding 
        season occurring immediately before the date on which the 
        Agreement enters into force.
  (d) Period of Relief.--The import relief that the President is 
authorized to provide under this section may not exceed 4 years.
  (e) Rate After Termination of Import Relief.--When import relief 
under this subtitle is terminated with respect to an article--
          (1) the rate of duty on that article after such termination 
        and on or before December 31 of the year in which termination 
        occurs shall be the rate that, according to the United States 
        Schedule to Annex 2.1 of the Agreement for the staged 
        elimination of the tariff, would have been in effect 1 year 
        after the initiation of the import relief action under section 
        211; and
          (2) the tariff treatment for that article after December 31 
        of the year in which termination occurs shall be, at the 
        discretion of the President, either--
                  (A) the rate of duty conforming to the applicable 
                rate set out in the United States Schedule to Annex 
                2.1; or
                  (B) the rate of duty resulting from the elimination 
                of the tariff in equal annual stages ending on the date 
                set out in the United States Schedule to Annex 2.1 for 
                the elimination of the tariff.

SEC. 214. TERMINATION OF RELIEF AUTHORITY.

  (a) General Rule.--Except as provided in subsection (b), no import 
relief may be provided under this subtitle after the date that is 15 
years after the date on which the Agreement enters into force.
  (b) Exception.--Import relief may be provided under this subtitle in 
the case of a Jordanian article after the date on which such relief 
would, but for this subsection, terminate under subsection (a), but 
only if the Government of Jordan consents to such provision.

SEC. 215. COMPENSATION AUTHORITY.

  For purposes of section 123 of the Trade Act of 1974 (19 U.S.C. 
2133), any import relief provided by the President under section 213 
shall be treated as action taken under chapter 1 of title II of such 
Act.

SEC. 216. SUBMISSION OF PETITIONS.

  A petition for import relief may be submitted to the Commission 
under--
          (1) this subtitle;
          (2) chapter 1 of title II of the Trade Act of 1974; or
          (3) under both this subtitle and such chapter 1 at the same 
        time, in which case the Commission shall consider such 
        petitions jointly.

       Subtitle C--Cases Under Title II of The Trade Act of 1974

SEC. 221. FINDINGS AND ACTION ON JORDANIAN IMPORTS.

  (a) Effect of Imports.--If, in any investigation initiated under 
chapter 1 of title II of the Trade Act of 1974, the Commission makes an 
affirmative determination (or a determination which the President may 
treat as an affirmative determination under such chapter by reason of 
section 330(d) of the Tariff Act of 1930), the Commission shall also 
find (and report to the President at the time such injury determination 
is submitted to the President) whether imports of the article from 
Jordan are a substantial cause of serious injury or threat thereof.
  (b) Presidential Action Regarding Jordanian Imports.--In determining 
the nature and extent of action to be taken under chapter 1 of title II 
of the Trade Act of 1974, the President shall determine whether imports 
from Jordan are a substantial cause of the serious injury found by the 
Commission and, if such determination is in the negative, may exclude 
from such action imports from Jordan.

SEC. 222. TECHNICAL AMENDMENT.

  Section 202(a)(8) of the Trade Act of 1974 (19 U.S.C. 2252(a)(8)) is 
amended in the first sentence--
          (1) by striking ``and part 1'' and inserting ``, part 1''; 
        and
          (2) by inserting before the period at the end ``, and title 
        II of the United States-Jordan Free Trade Area Implementation 
        Act''.

                       TITLE III--TEMPORARY ENTRY

SEC. 301. NONIMMIGRANT TRADERS AND INVESTORS.

  Upon the basis of reciprocity as provided for by the Agreement, an 
alien who is a national of Jordan (and any spouse or child (as defined 
in section 101(b)(1) of the Immigration and Nationality Act (8 U.S.C. 
1101(b)(1)) of the alien, if accompanying or following to join the 
alien) shall be considered to be entitled to enter the United States 
under and in pursuance of the provisions of the Agreement as a 
nonimmigrant described in section 101(a)(15)(E) of the Immigration and 
Nationality Act (8 U.S.C. 1101(a)(15)(E)), if the entry is solely for a 
purpose described in clause (i) or (ii) of such section and the alien 
is otherwise admissible to the United States as such a nonimmigrant.

                      TITLE IV--GENERAL PROVISIONS

SEC. 401. RELATIONSHIP OF THE AGREEMENT TO UNITED STATES AND STATE LAW.

  (a) Relationship of Agreement to United States Law.--
          (1) United states law to prevail in conflict.--No provision 
        of the Agreement, nor the application of any such provision to 
        any person or circumstance, that is inconsistent with any law 
        of the United States shall have effect.
          (2) Construction.--Nothing in this Act shall be construed--
                  (A) to amend or modify any law of the United States, 
                or
                  (B) to limit any authority conferred under any law of 
                the United States,
        unless specifically provided for in this Act.
  (b) Relationship of Agreement to State Law.--
          (1) Legal challenge.--No State law, or the application 
        thereof, may be declared invalid as to any person or 
        circumstance on the ground that the provision or application is 
        inconsistent with the Agreement, except in an action brought by 
        the United States for the purpose of declaring such law or 
        application invalid.
          (2) Definition of state law.--For purposes of this 
        subsection, the term ``State law'' includes--
                  (A) any law of a political subdivision of a State; 
                and
                  (B) any State law regulating or taxing the business 
                of insurance.
  (c) Effect of Agreement With Respect to Private Remedies.--No person 
other than the United States--
          (1) shall have any cause of action or defense under the 
        Agreement; or
          (2) may challenge, in any action brought under any provision 
        of law, any action or inaction by any department, agency, or 
        other instrumentality of the United States, any State, or any 
        political subdivision of a State on the ground that such action 
        or inaction is inconsistent with the Agreement.

SEC. 402. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated for each fiscal year after 
fiscal year 2001 to the Department of Commerce not more than $100,000 
for the payment of the United States share of the expenses incurred in 
dispute settlement proceedings under article 17 of the Agreement.

SEC. 403. IMPLEMENTING REGULATIONS.

  After the date of enactment of this Act--
          (1) the President may proclaim such actions, and
          (2) other appropriate officers of the United States may issue 
        such regulations,
as may be necessary to ensure that any provision of this Act, or 
amendment made by this Act, that takes effect on the date the Agreement 
enters into force is appropriately implemented on such date, but no 
such proclamation or regulation may have an effective date earlier than 
the date the Agreement enters into force.

SEC. 404. EFFECTIVE DATES; EFFECT OF TERMINATION.

  (a) Effective Dates.--Except as provided in subsection (b), the 
provisions of this Act and the amendments made by this Act take effect 
on the date the Agreement enters into force.
  (b) Exceptions.--Sections 1 through 4 and this title take effect on 
the date of enactment of this Act.
  (c) Termination of the Agreement.--On the date on which the Agreement 
ceases to be in force, the provisions of this Act (other than this 
subsection) and the amendments made by this Act, shall cease to have 
effect.

                               I. SUMMARY

    S. 643 implements the Agreement Between the United States 
of America and the Hashemite Kingdom of Jordan on the 
Establishment of a Free Trade Area (``the Agreement'') in order 
to strengthen and develop economic relations between the United 
States and Jordan for their mutual benefit. The bill 
establishes free trade between the two countries through the 
removal of trade barriers.
    On October 24, 2000, President Clinton and His Majesty King 
Abdullah II bin Al-Hussein signed an agreement to establish a 
free trade area between the United States and Jordan. On 
January 6, 2001, President Clinton transmitted the Agreement to 
the 107th Congress for approval, together with the necessary 
implementing legislation.
    S. 643 approves the Agreement and makes changes to U.S. law 
necessary to implement the Agreement. The bill authorizes the 
President to proclaim reductions, and eventual elimination, of 
tariffs on goods imported from Jordan according to a schedule 
provided for in the Agreement. The bill also establishes rules 
of origin for determining whether goods imported from Jordan 
are, in fact, Jordanian goods subject to tariff treatment under 
the Agreement.
    Additionally, consistent with the Agreement, the bill 
establishes a safeguard mechanism to enable the extension of 
relief to American industries seriously injured (or threatened 
with serious injury) due to increased imports resulting from 
tariff reductions and elimination. The bill also amends the 
general safeguards provision in U.S. law (chapter 1 of title II 
of the Trade Act of 1974), to include special rules governing 
the treatment of products from Jordan in any measure imposed 
under that provision.
    The bill contains a provision to facilitate the entry of 
Jordanian nationals into the United States as non-immigrants. 
Finally, the bill authorizes certain expenditures by the U.S. 
Government to support operation of the Agreement's dispute 
settlement mechanism.

                        II. GENERAL EXPLANATION


                             A. Background

    On June 6, 2000, President Clinton and King Abdullah II 
announced their intention to launch negotiation of an agreement 
to establish a free trade area between the United States and 
Jordan. Negotiations concluded, and the two leaders signed an 
agreement on October 24, 2000. President Clinton submitted the 
Agreement to the 107th Congress on January 6, 2001.
    On March 28, 2001, Senator Max Baucus introduced 
legislation in the Senate (S. 643) to implement the Agreement. 
Congressman Sander M. Levin introduced identical legislation in 
the House (H.R. 1484) on April 4, 2001. Congressman William M. 
Thomas introduced similar legislation (H.R. 2603) on July 26, 
2001.
    On March 20, 2001, the Committee on Finance held a public 
hearing on the Agreement. Witnesses appearing before the 
Committee were Charlene Barshefsky (former U.S. Trade 
Representative); Samuel R. Berger (former National Security 
Advisor); Michael B. Smith (former Deputy U.S. Trade 
Representative); Timothy E. Deal (Senior Vice President, U.S. 
Council for International Business); Thomas J. Donohue 
(President and CEO, U.S. Chamber of Commerce); Professor 
Jagdish Bhagwati (Arthur Lehman Professor of Economics and 
Political Science, Columbia University, and Andrew Meyer Senior 
Fellow in International Economics, Council on Foreign 
Relations); Roger Schlickeisen (President, Defenders of 
Wildlife); and John Sweeney (President, AFL-CIO). Other persons 
submitted written testimony for the record.
    The principal negotiator of the Agreement, former U.S. 
Trade Representative Charlene Barshefsky, expressed strong 
support for early enactment of the Agreement ``as both a 
critical element of America's Middle East policy, and a market 
opening free trade agreement.'' Barshefsky noted that, in 
negotiating the Agreement, the Clinton Administration had three 
specific strategic goals: first, to encourage regional economic 
integration in the Middle East generally; second, to support 
Jordan's economic reform program in particular; and third, to 
develop a comprehensive and innovative free trade agreement, 
which would set a new standard for rigorous trade 
liberalization and help bolster bipartisan consensus for trade 
policy in the United States.
    On April 5, 2001, Finance Committee members met in 
executive session with King Abdullah II in Washington, DC to 
discuss the Agreement and congressional support for its 
implementation.
    The Jordanian Parliament ratified the Agreement on May 9, 
2001.
    In a markup begun on July 17, 2001, the Finance Committee 
debated the bill implementing the Agreement and approved an 
amendment in the nature of a substitute. The amendment made 
certain technical corrections to the bill as introduced.
    Separate from the Agreement itself, on July 23, 2001, the 
United States and Jordan exchanged letters, signed by U.S. 
Trade Representative Robert Zoellick and Jordanian Ambassador 
Marwan Muasher, respectively, clarifying each Government's 
understanding of the implementation of the Agreement's dispute 
settlement procedures. The letters state the view of both 
Governments that few, if any, differences will arise over 
interpretation or application of the Agreement. In the event 
that differences do arise under the Agreement, the letters 
state that each Government will make every effort to resolve 
them without resort to the dispute settlement procedures in the 
Agreement. The Governments also state their intention not to 
apply the Agreement's dispute settlement enforcement procedures 
in a manner that results in blocking trade. The letters further 
state that bilateral consultations and other procedures, 
particularly alternative mechanisms, would be appropriate 
measures to secure compliance without resort to traditional 
trade sanctions.
    The markup of S. 643 continued on July 26, 2001, at which 
time the Finance Committee reported S. 643 to the full Senate 
without further amendment.

                     B. United States-Jordan Trade

    The United States has consistently had a merchandise trade 
surplus with Jordan, its 101st largest trading partner. In 
2000, total bilateral trade between the United States and 
Jordan was valued at $386 million, with U.S. exports to Jordan 
totaling $312.7 million, and imports from Jordan totaling $73.2 
million.
    Principal U.S. exports to Jordan include wheat and grains, 
aircraft and helicopter parts, tobacco, and radio transceivers. 
Exports of durum wheat, other wheat and meslin, and barley--
which comprise about 20 percent of total U.S. exports to 
Jordan--already enter Jordan duty-free. Tariff rates for other 
commodities vary from as low as 0-10 percent for aircraft 
turbine engines, to as high as 70 percent for tobacco.
    Principal Jordanian exports to the United States include 
trunks and suitcases, women's and girl's clothing, men's and 
boy's suits, sweaters and pullovers, and jewelry. In 2000, 
approximately 40 percent (or $30 million) of all Jordanian 
exports to the United States entered the United States duty-
free, because they were products of Qualifying Industrial Zones 
(``QIZs'').
    QIZs are areas along the Israel-Jordan and Israel-Egypt 
borders that are specially designated by the U.S. Trade 
Representative (``USTR''). Pursuant to the United States-Israel 
Free Trade Area Implementation Act of 1985 (19 U.S.C. Sec. 2112 
note) as amended by Public Law No. 104-234, products 
originating in a QIZ receive duty-free treatment upon entry 
into the United States. The first QIZ in Jordan was opened in 
1998. Since then, USTR has designated nine additional QIZs 
along the Israel-Jordan border.
    In addition to imports into the United States originating 
from QIZs in Jordan, another 14 percent (or $10 million) of 
imports into the United States from Jordan in 2000 received 
duty-free treatment under the U.S. Generalized System of 
Preferences.

                                     U.S. TOTAL EXPORTS TO JORDAN 1996-2000
                                               [In actual dollars]
----------------------------------------------------------------------------------------------------------------
                                                1996          1997          1998          1999          2000
----------------------------------------------------------------------------------------------------------------
100110--Durum wheat.......................         3,850       444,611     3,683,790             0    44,469,720
880330--Parts of airplanes or helicopters.    11,955,736    24,641,479    51,582,815    25,121,207    16,104,902
100190--Wheat (other than durum wheat) and    51,871,145    56,674,184    32,536,312    26,803,267    14,154,073
 meslin...................................
240310--Smoking tobacco...................     2,674,625     4,945,736    11,312,858     9,308,040    14,077,933
470321--Chemical woodpulp.................     6,234,344     3,774,668     6,215,596     5,195,956    10,770,393
890590--Floating cranes, floating docks,               0             0             0             0     9,137,800
 fire floats, etc.........................
852520--TV and Radio Receivers............     1,631,983     4,121,849     6,613,537     1,320,473     8,781,037
841112--Turbojets (thrust exceeding 25 KN)             0             0             0             0     7,098,800
988000--Low value export shipments (non-       6,702,389     7,425,816     7,098,136     5,314,233     5,720,249
 Canadian)................................
100300--Barley............................     7,510,327     6,825,000             0             0     5,150,000
Other.....................................   256,224,017   293,493,316   234,043,085   202,577,507   177,278,661
                                           ---------------------------------------------------------------------
      Total...............................   344,808,416   402,346,659   353,086,129   275,640,683  312,743,568
----------------------------------------------------------------------------------------------------------------
Source: U.S. International Trade Commission Dataweb.


                                    U.S. TOTAL IMPORTS FROM JORDAN 1996-2000
                                               [In actual dollars]
----------------------------------------------------------------------------------------------------------------
                                                1996          1997          1998          1999          2000
----------------------------------------------------------------------------------------------------------------
420212--Trunks, suitcases and vanity cases             0             0             0       194,670     8,510,447
620462--Women's and girls' cotton trousers       621,308       516,151             0        97,641     6,651,841
 and shorts...............................
620463--Women's and girls' trousers and           68,538        76,916       317,380             0     5,230,343
 shorts made from synthetic fibers........
711319--Jewelry (not made from silver)....     2,494,053     2,321,864     2,628,522     3,594,888     4,953,719
620311--Men's or boys' suits of wool (or          48,036       297,368        82,329       466,952     4,544,712
 other fine animal hair)..................
611020--Cotton sweaters and pullovers.....     3,127,162       739,214       594,509       178,137     4,407,223
620342--Men's or boys' trousers and shorts       412,016         2,140       191,472       493,108     4,388,537
 of cotton................................
711311--Silver jewelry....................             0             0        23,294       842,697     4,316,705
611030--Knitted or crocheted sweaters and         45,108             0             0         2,305     4,107,626
 pullovers of manmade fibers..............
980100--Imports of articles exported and       6,335,233    13,605,588     2,953,908    18,520,997     4,011,492
 returned.................................
Other.....................................    11,953,617     8,074,936     9,598,964     6,603,826    21,718,925
                                           ---------------------------------------------------------------------
      Total...............................    25,105,071    25,634,177    16,390,378    30,995,221   72,841,570
----------------------------------------------------------------------------------------------------------------
Source: U.S. International Trade Commission Dataweb.

    The Agreement provides for a 10-year transitional period, 
during which duties on almost all goods (with the exception of 
tobacco and tobacco-related products) will be phased out, 
leading to duty-free trade in goods between the United States 
and Jordan. Duties on many goods will be phased out well before 
the end of the 10-year transitional period. The Agreement also 
provides for a liberalization of bilateral trade in services. 
It addresses specific market-opening commitments in various 
sectors, including (but not limited to) communications, 
construction and engineering, distribution, education, 
environmental services, finance, healthcare, tourism, 
recreation, and transportation.
    A study by the U.S. International Trade Commission 
(Economic Impact on the United States of a U.S.-Jordan Free 
Trade Agreement, Inv. No. 332-418) concluded that a U.S.-Jordan 
free trade agreement ``would have no measurable impacts on 
total U.S. exports, total U.S. imports, U.S. production, or 
U.S. employment.'' As noted above, much of the trade between 
the United States and Jordan already is duty-free. The 
International Trade Commission study did conclude that a U.S.-
Jordan free trade agreement could lead to a modest increase in 
bilateral trade. In particular, exports of Jordanian textiles 
and apparel to the United States, as well as U.S. exports to 
Jordan of commodities that face relatively high tariffs today, 
could expand under an agreement.

                            C. The Agreement

    The Agreement comprises an integrated set of reciprocal 
obligations that will eliminate barriers to trade between 
Jordan and the United States in a manner that is consistent 
with Article XXIV of the General Agreement on Tariffs and Trade 
1994 (``GATT 1994'') and Article V of the General Agreement on 
Trade in Services (``GATS'').
    Trade in Goods.--The principal feature of the Agreement is 
the mutual elimination of tariffs within 10 years. Various 
provisions also limit non-tariff trade barriers and distortions 
of trade.
    For purposes of tariff elimination, the Agreement divides 
products into ``staging'' categories. Where current tariffs are 
less than 5 percent, the tariffs will be eliminated in 2 years. 
In general, tariffs between 5 and 10 percent will be eliminated 
in 4 years. Tariffs between 10 and 20 percent will be 
eliminated in 5 years. Tariffs in excess of 20 percent will be 
eliminated in 10 years.
    Some of the Jordanian products that will receive duty-free 
treatment 2 years after the Agreement comes into force are 
jewelry, sea bath salts, certified handloomed fabric, and a 
variety of chemicals and fruit. Some Jordanian exports that 
will be subject to tariff reductions but will not enter the 
United States duty-free until the end of the 10-year phase-in 
period are footwear, ceramics, dairy, sugar, and certain 
textiles and apparel currently subject to tariffs in excess of 
20 percent.
    Some of the U.S. products that will receive duty-free 
treatment 2 years after theAgreement comes into force are 
certain chemicals (including plastics), machinery and parts, paper 
products, and agricultural items such as seed and rice. Some U.S. 
exports that will be subject to tariff reductions but will not enter 
Jordan duty-free until the end of the 10-year phase-in period are fruit 
juice, fruit, wood and paper, scientific equipment, and textiles.
    Trade in Services.--The Agreement commits the countries to 
provide increased market access in particular service sectors 
identified in schedules attached to the Agreement. For Jordan, 
these sectors include (but are not limited to): legal services, 
accounting and auditing, architectural and engineering 
services, computer and related services, research and 
development, real estate, telecommunications, and financial 
services. The U.S. schedule contains a similarly broad array of 
service sectors. The schedules set forth certain terms, 
limitations and conditions specific to particular sectors. 
Subject to these terms, limitations and conditions, each 
country agrees to accord services and service suppliers of the 
other country treatment no less favorable than it accords to 
its own like services and service suppliers.
    Intellectual Property Rights.--The Agreement contains 
obligations in the area of intellectual property that 
supplement the countries' obligations under the World Trade 
Organization Agreement on Trade-Related Aspects of Intellectual 
Property. For example, the Agreement requires the countries to 
give effect to provisions contained in other conventions on 
intellectual property, such as the World Intellectual Property 
Organization (``WIPO'') Copyright Treaty (1996) and the WIPO 
Performances and Phonograms Treaty (1996). The Agreement 
contains a general obligation that each country accord to 
nationals of the other country treatment no less favorable than 
it accords to its own nationals with regard to the protection 
and enjoyment of all intellectual property rights. It also 
contains general obligations with respect to enforcement. Thus, 
for example, with respect to copyright and trademark piracy, 
both countries are required to provide for the initiation of 
criminal and seizure actions by its national authorities 
without advance notice to the alleged pirates. The Agreement 
then specifies particular obligations in the areas of 
trademarks and geographical indications, copyright and related 
rights, and patents. Most obligations concerning intellectual 
property rights will take effect three years after the 
Agreement enters into force.
    Concurrent with conclusion of the Agreement, the United 
States and Jordan entered into a Memorandum of Understanding on 
Issues Related to the Protection of Intellectual Property 
Rights. That document identifies certain changes to Jordanian 
law that will be made pursuant to the intellectual property 
provisions in the Agreement itself.
    Environment.--In article 5, the Agreement states that the 
United States and Jordan ``shall strive to ensure'' that they 
do not ``waive or otherwise derogate from, or offer to waive or 
otherwise derogate from,'' their respective environmental laws 
``as an encouragement for trade'' with each other. Article 5 
also states that each country ``shall strive to ensure'' that 
its laws provide for ``high levels of environmental 
protection'' and ``shall strive to continue to improve those 
laws.''
    Article 5.3 of the Agreement states that each country shall 
not fail to effectively enforce its own environmental laws, 
through a sustained or recurring course of action or inaction, 
in a manner affecting trade between the countries. This 
provision is not implicated when either country undertakes a 
course of action or inaction which reflects a reasonable 
exercise of discretion or results from a bona fide decision 
regarding the allocation of resources.
    Additionally, in a joint statement annexed to the 
Agreement, the United States and Jordan agreed to establish a 
Joint Forum on Environmental Technical Cooperation. The Joint 
Forum will meet on a regular basis and has a mandate to develop 
technical cooperation initiatives for environmental protection 
in Jordan.
    Labor.--Article 6.4 of the Agreement states that each 
country shall not fail to effectively enforce its own labor 
laws, through a sustained or recurring course of action or 
inaction, in a manner affecting trade between the countries. 
This provision is not implicated when either country undertakes 
a course of action or inaction which reflects a reasonable 
exercise of discretion or results from a bona fide decision 
regarding the allocation of resources. Each country also 
reaffirms its obligations as a member of the International 
Labor Organization (``ILO'') and its commitments under the ILO 
Declaration of Fundamental Principles and Rights at Work and 
its Follow-up. The countries agree to ``strive to ensure'' that 
principles defined by the ILO as ``core'' are ``recognized and 
protected by domestic law.'' The five core principles, as set 
forth in article 6.6 of the Agreement, are: (a) right of 
association; (b) right to organize and bargain collectively; 
(c) prohibition on the use of any form of forced or compulsory 
labor; (d) minimum age for the employment of children; and (e) 
acceptable conditions of work with respect to minimum wages, 
hours of work, and occupational safety and health.
    In article 6.2, the Agreement states that the United States 
and Jordan ``shall strive to ensure'' that they do not ``waive 
or otherwise derogate from, or offer to waive or otherwise 
derogate from,'' their respective labor laws ``as an 
encouragement for trade'' with each other.
    Electronic Commerce.--The United States and Jordan agree to 
``seek to refrain'' from imposing new barriers, including both 
tariffs and non-tariff barriers, on electronic transmissions.
    Visa Commitments.--The United States and Jordan each agree 
to allow nationals of the other to enter and remain in their 
respective territories for purposes of facilitating trade and 
investment.
    Government Procurement.--The United States and Jordan agree 
to enter into negotiations on Jordan's accession to the World 
Trade Organization Agreement on Government Procurement.
    Safeguard Measures.--Under the Agreement, a country may put 
a ``safeguard'' measure in place if, as a result of the 
reduction or elimination of a duty, imports of a good from the 
other country are increasing in such quantities and under such 
conditions as to be a substantial cause of serious injury, or 
threat thereof, to a domestic industry producing a like or 
directly competitiveproduct. A safeguard measure may take the 
form of a suspension of the reduction of a duty or an increase in a 
duty rate. However, in the case of an increase, the duty rate may not 
exceed the most-favored-nation (``MFN'') duty rate.
    Procedural requirements for putting a safeguard measure in 
place under the Agreement are identical to the requirements for 
putting a general safeguard measure in place under WTO rules. 
For the United States, this means an investigation and 
determination by the U.S. International Trade Commission 
(``ITC'') into whether the requirements for a safeguard have 
been met. If the ITC's determination is affirmative, then the 
President must decide, in light of that determination, whether 
to put a measure in place and, if so, what measure.
    A safeguard measure may remain in place only for the period 
necessary to prevent or remedy serious injury to, and to 
facilitate adjustment by, the domestic industry and, in any 
event, not longer than 4 years. No measure may be put in place 
against a good as to which a safeguard measure was previously 
imposed under the Agreement. A country imposing a measure for 
longer than 1 year is required to liberalize the measure (i.e., 
reduce tariff rates) on a regular basis.
    Upon termination of a safeguard measure, duties on the 
subject goods will be the rates that ordinarily would have 
applied 1 year after the measure was initiated. The Agreement 
provides for further duty reductions beginning on January 1 of 
the year after a measure is terminated.
    A country imposing a safeguard measure is required to 
provide ``concessions having substantially similar trade 
effects'' to the other country. In the event that the countries 
are unable to agree on concessions, the other country may raise 
tariffs on imports from the country imposing the measure. 
However, in general, it may do so only after the measure has 
been in effect for 2 years.
    The safeguard provisions under the Agreement are in 
addition to the general safeguard provisions under WTO rules. 
Thus, if the United States were to put a safeguard measure in 
place under Chapter 1 of Title II of the Trade Act of 1974, 
such measure could include imports from Jordan, along with 
imports from all other sources. However, under the Agreement, 
imports from Jordan may be excluded from a general safeguard 
measure if such imports, by themselves, are not a substantial 
cause of serious injury or threat thereof.
    Balance of Payments.--In taking trade-restrictive measures 
to safeguard their balance of payments, Jordan and the United 
States agree to abide by WTO balance-of-payments disciplines.
    Exceptions.--The Agreement sets forth three categories of 
exceptions to its ordinary rules. These include the general 
exceptions to WTO rules on trade in goods, set forth in article 
XX of the GATT 1994; certain measures taken for national 
security reasons; and, in general, measures concerning 
taxation.
    Economic Cooperation and Technical Assistance.--The 
Agreement commits the United States and Jordan to foster 
economic cooperation and, given Jordan's developing country 
status, commits the United States to provide Jordan economic 
technical assistance, as appropriate.
    Rules of Origin and Cooperation in Customs 
Administration.--Preferential tariff treatment under the 
Agreement is available only to goods originating in Jordan or 
the United States. An annex to the Agreement sets forth rules 
for determining the origin of goods. The Agreement states that 
each country ``shall strive to administer such rules 
effectively, uniformly, and consistently with the object and 
purpose of [the] Agreement and the WTO Agreement.'' The 
Agreement further provides for consultations on the operation 
of these rules.
    Joint Committee.--The Agreement establishes a joint 
committee to oversee implementation of the Agreement. The Joint 
Committee consists of the U.S. Trade Representative and the 
Jordanian Minister for Trade, or their respective designees. 
The Joint Committee will meet once a year in regular session, 
and in special sessions within 30 days of a request by either 
country. Its responsibilities will include (among other tasks) 
reviewing the functioning of the Agreement, avoiding trade 
disputes, considering amendments to the Agreement, and 
establishing guidelines for administering rules of origin.
    Consultations.--The United States and Jordan agree to 
consult on all matters concerning interpretation and 
application of the Agreement, and each commits to reply 
promptly to requests by the other for consultations.
    Dispute Settlement.--The Agreement establishes a dispute 
settlement mechanism to resolve disputes over interpretation of 
the Agreement, claims that a country has violated obligations 
under the Agreement, and claims that measures taken by a 
country ``severely distort the balance of trade benefits'' 
accorded by the Agreement or ``substantially undermine 
fundamental objectives'' of the Agreement.
    When a dispute arises, the parties are required, first, to 
make ``every attempt to arrive at a mutually agreeable 
resolution'' through consultations. Should consultations fail, 
either country may refer the matter to the Joint Committee, 
described above. If the Joint Committee fails to resolve the 
matter within 90 days, then the matter may be referred to a 
dispute settlement panel, composed of one member chosen by each 
country and a chairman chosen by the first two members.
    A dispute settlement panel is required to make findings of 
fact and a determination as to whether either country has 
violated an obligation under the Agreement or taken measures 
that severely distort the balance of trade benefits or 
substantially undermine the fundamental objectives of the 
Agreement. The panel may make recommendations concerning 
resolution of the dispute only if both countries ask it to do 
so.
    A dispute settlement panel's report is non-binding. 
Resolution of a dispute ultimately isin the hands of the Joint 
Committee, which must ``endeavor to resolve the dispute, taking the 
report into account, as appropriate.'' If the Joint Committee fails to 
resolve the dispute within 30 days of presentation of the panel's 
report, then the country affected by any measures found by the panel to 
be violations of the Agreement or to severely distort trade benefits or 
to substantially undermine the Agreement's fundamental objectives 
``shall be entitled to take any appropriate and commensurate measure.''
    Concurrently with conclusion of the Agreement, the United 
States and Jordan entered into a Memorandum of Understanding on 
Transparency in Dispute Settlement. That document requires 
that, when dispute settlement is triggered, both countries 
``shall solicit and consider the views of members of their 
respective publics in order to draw upon a broad range of 
perspectives.'' It further requires that submissions to panels 
be made available to the public within 10 days of filing, that 
oral presentations to panels be made open to the public, that 
amicus briefs be accepted and considered, and that panel 
reports be released to the public ``at the earliest possible 
time.'' The foregoing requirements do not obligate the 
countries to disclose confidential information.
    In a Joint Statement issued concurrently with conclusion of 
the Agreement, the United States and Jordan agreed to support 
the application of similar transparency-related procedures in 
disputes between the two countries that may be brought before 
panels in the WTO.
    No Private Right of Action.--Neither the United States nor 
Jordan may provide for a private right of action under domestic 
law that would allow a person to claim that a measure taken by 
the other country constituted a violation of the Agreement.
    Entry Into Force.--The Agreement will enter into force 2 
months after the United States and Jordan exchange written 
notifications of ratification of the Agreement by their 
respective legislatures.
    Termination.--Either country may terminate the Agreement by 
providing written notice to the other. In that case, the 
Agreement will expire six months after the provision of such 
notification.

                        III. THE COMMITTEE BILL


Section 1. Short title

    The short title of the bill is the ``United States-Jordan 
Free Trade Area Implementation Act.''

Section 2. Purposes

    Section 2 identifies the following three purposes of the 
bill: (1) to implement the Agreement between the United States 
and Jordan establishing a free trade area, (2) to strengthen 
and develop the economic relations between the United States 
and Jordan for their mutual benefit, and (3) to establish free 
trade between the two nations through the removal of trade 
barriers.

Section 3. Definitions

    Section 3 defines the terms ``Agreement'' and ``HTS.'' For 
the purpose of this bill, the term ``Agreement'' means the 
Agreement between the United States of America and the 
Hashemite Kingdom of Jordan on the Establishment of a Free 
Trade Area, entered into on October 24, 2000. The term ``HTS'' 
means the Harmonized Tariff Schedule of the United States.

Section 4. Approval of Agreement

    Section 4 expresses congressional approval of the 
Agreement.

             Title I--Tariff Modifications; Rules of Origin


Section 101. Tariff modifications

    Section 101 authorizes the President to proclaim changes to 
duties (or, as the case may be, continuation of duties) on 
goods imported from Jordan as necessary or appropriate to 
implement the Agreement.

Section 102. Rules of origin

    Section 102 provides that in order for an article to 
receive duty-free or reduced tariff treatment under the 
Agreement, it must be imported into the United States directly 
from Jordan and meet one of two rules of origin. The article 
must be either (1) wholly the growth, product, or manufacture 
of Jordan, or (2) partially the growth, product, or manufacture 
of Jordan, provided that it meets certain criteria. The 
principal criterion under this second rule is that materials 
produced in Jordan plus the direct costs of processing 
operations performed in Jordan constitute not less than 35 
percent of the appraised value of the article upon entry into 
the United States. However, if materials produced in the United 
States are included in the article, the value of such materials 
up to 15 percent of the appraised value of the article may 
contribute to the 35 percent requirement. Additional special 
rules of origin apply to textile and apparel products.

                     Title II--Relief From Imports


                     SUBTITLE A--GENERAL PROVISIONS

Section 201. Definitions

    Section 201 defines the terms ``Commission'' and 
``Jordanian article.'' The term ``Commission'' means the United 
States International Trade Commission. The term ``Jordanian 
article'' means an article that qualifies for reduction or 
elimination of a duty under section 102 of the bill.

     SUBTITLE B--RELIEF FROM IMPORTS BENEFITING FROM THE AGREEMENT

    Subtitle B establishes a mechanism for certain U.S. persons 
to petition for and receive relief from serious injury (or the 
threat thereof) resulting from import surges of products 
receiving duty-free or reduced tariff treatment under the 
Agreement.

Section 211. Commencing of action for relief

    Parties eligible to petition for relief under this subtitle 
would include trade associations, firms, unions, or groups of 
workers representative of an industry. As under the general 
safeguards provisions in U.S. law (Chapter 1 of Title II of the 
Trade Act of 1974), parties would file their petitions with the 
U.S. International Trade Commission (``ITC''). The ITC then 
would be required to investigate and determine whether, as a 
result of the reduction or elimination of a duty under the 
Agreement, a Jordanian article is being imported into the 
United States in such increased quantities and under such 
conditions that imports of the article alone constitute a 
substantial cause of serious injury (or threat thereof) to the 
U.S. industry producing a like or directly competitive article. 
Procedures for investigating and making this determination 
would be similar to the general safeguards procedures. An 
investigation could not be initiated with respect to a 
Jordanian article if import relief under this subtitle 
previously had been granted with respect to that article.

Section 212. Commission action on petition

    The time for the ITC to act upon a petition filed under 
section 211 of the bill would be identical to the time for ITC 
action under the general safeguard provisions of the Trade Act 
of 1974. Ordinarily, the ITC must make its determination within 
120 days following initiation of an investigation. Where a 
petitioner alleges that critical circumstances exist and, 
therefore, seeks provisional relief, the ITC would have 180 
days in which to make its final determination. (The present 
bill incorporates by reference (at section 211(c)(3)) the 
procedures for making a determination on provisional relief set 
forth at section 202(d) of the Trade Act of 1974.)
    If the ITC determined that ``a Jordanian article is being 
imported into the United States in such increased quantities, 
in absolute terms or relative to domestic production, and under 
such conditions that imports of the Jordanian article alone 
constitute a substantial cause of serious injury or threat 
thereof to the domestic industry producing an article that is 
like, or directly competitive with, the imported article,'' 
then the ITC would be required to recommend the amount of 
relief necessary to remedy or prevent serious injury to the 
U.S. industry. Within 30 days of making its determination, the 
ITC would be required to submit a report to the President 
explaining the basis for its determination and recommended 
relief, along with any dissenting and separate views. The bill 
would require that report to be promptly made public.

Section 213. Provision of relief

    Within 30 days of receipt of the ITC's report containing an 
affirmative determination, the President ordinarily would be 
required to provide relief to the U.S. industry to the extent 
necessary to prevent or remedy the injury identified by the ITC 
and to facilitate the industry's positive adjustment to import 
competition. The President could decline to provide such relief 
only if (1) he found that ``taking such action would have an 
adverse impact on the United States economy clearly greater 
than the benefits of taking such action,'' or (2) in 
``extraordinary circumstances,'' he found that ``the provision 
of such relief would cause serious harm to the national 
security of the United States.''
    In general, the relief granted could be either a suspension 
of tariff reductions or a ``snap-back'' of tariffs to their 
ordinary, MFN rate. Relief could be granted for up to 4 years. 
Prior to December 31 in the year in which relief ended, upon 
the termination of relief, tariff rates would be the rates that 
would have applied 1 year after the initiation of the action. 
After December 31, tariff rates could be either (at the 
President's discretion) (1) the rates that ordinarily would 
have applied at that date, or (2) the rates resulting from the 
elimination of the tariff in equal annual stages ending on the 
scheduled date for tariff elimination.

Section 214. Termination of relief authority

    Section 214 would cause the safeguard provision of subtitle 
B to expire 15 years after the Agreement entered into force 
unless, in a particular case, Jordan agreed to have a safeguard 
measure applied after the initial 15-year period.

Section 215. Compensation authority

    Section 215 establishes that section 123 of the Trade Act 
of 1974, which authorizes the President to compensate another 
country in the event certain safeguards measures are imposed on 
products from that country, would apply to safeguards imposed 
under the Agreement.

Section 216. Submission of petitions

    Section 216 would permit a petition for safeguard relief to 
be submitted to the ITC under either subtitle B of the present 
bill, section 201 of the Trade Act of 1974, or both.

       SUBTITLE C--CASES UNDER TITLE II OF THE TRADE ACT OF 1974

    This subtitle would govern the treatment of imports from 
Jordan in general safeguards investigations and relief 
determinations under section 201 of the Trade Act of 1974.

Section 221. Findings and action on Jordanian imports

    When the ITC makes an affirmative determination under 
section 201 of the Trade Act of 1974 (i.e., that increased 
imports of a given product are a substantial cause of serious 
injury (or threat thereof) to a domestic producer of like or 
directly competitive products), section 221 of the present bill 
would require it to make a separate determination regarding 
imports from Jordan of the product under investigation. The ITC 
would have to determine whether imports from Jordan were 
themselves a substantial cause of serious injury (or threat 
thereof). The President, too, would have to make a separate 
determination regarding products from Jordan and, if that 
determination were negative, he could opt to exclude products 
from Jordan from the relief provided to the U.S. industry.

Section 222. Technical amendment

    Section 222 would extend the general rules governing ITC 
treatment of confidential information to information received 
in connection with a safeguards investigation under the 
Agreement.

                       Title III--Temporary Entry


Section 301. Nonimmigrant traders and investors

    Section 301 would implement the Agreement's requirement 
that each country allow nationals of the other to enter and 
remain in its territory for purposes of facilitating trade and 
investment.

                      Title IV--General Provisions


Section 401. Relationship of the Agreement to United States and state 
        law

    Section 401 provides that the Agreement would not have 
direct effect in the United States. Rather, the Agreement would 
take effect through the present implementing legislation. To 
the extent that there may be inconsistencies between U.S. law 
and the Agreement, U.S. law would prevail. Further, only the 
U.S. Government would be authorized to sue to have a state law 
declared invalid due to a conflict with the Agreement. Finally, 
section 401 provides that the Agreement would not give rise to 
any private rights of action.

Section 402. Authorization of appropriations

    Section 402 would authorize up to $100,000 in 
appropriations to the Department of Commerce for each fiscal 
year after fiscal year 2001 to support the United States' share 
of expenses incurred in dispute settlement proceedings under 
article 17 of the Agreement.

Section 403. Implementing regulations

    Section 403 would authorize the President and Executive 
Branch agencies to promulgate regulations and to take such 
other actions as may be necessary to make the present bill 
effective when the Agreement enters into force.

Section 404. Effective dates; effect of termination

    Section 404 would make this bill and amendments to current 
law made thereby effective on the date the Agreement enters 
into force. Certain provisions, such as congressional approval 
of the Agreement, would take effect upon enactment. Finally, 
the bill and any amendments to U.S. law made by it would cease 
to have effect on the date on which the Agreement ceased to be 
in force.

                        IV. CONGRESSIONAL ACTION

    On January 6, 2001, President Clinton, in a message to 
Congress, transmitted the Agreement between the Hashemite 
Kingdom of Jordan and the United States of America on the 
Establishment of a Free Trade Area, signed October 24, 2000, 
including annexes forming an integral part of the Agreement.
    On March 28, 2001, Senator Baucus (for himself and others) 
introduced S. 643, a bill to implement the Agreement. The bill 
was read twice and referred to the Committee on Finance.
    On April 4, 2001, Congressman Levin (for himself and 
others) introduced a substantively identical bill (H.R. 1484). 
The bill was referred to the Committee on Ways and Means.
    On July 17, 2001, the Finance Committee began debate on the 
bill implementing the Agreement and approved an amendment in 
the nature of a substitute to the bill. The amendment in the 
nature of a substitute added to S. 643 a provision expressing 
congressional approval of the Agreement and made certain 
technical corrections to the bill as introduced.
    On July 24, 2001, Congressman Thomas introduced H.R. 2603, 
the United States-Jordan Free Trade Area Implementation Act, 
which was referred to the Committee on Ways and Means and the 
Committee on the Judiciary. The Committee on Ways and Means 
held a markup on July 26, 2001 and, upon a voice vote, ordered 
reported to the full House an amendment in the nature of a 
substitute to H.R. 2603.
    On July 26, 2001, the Finance Committee completed its 
markup of S. 643 and ordered the bill reported to the full 
Senate without further amendment.
    On July 31, 2001, the House of Representatives, on a motion 
to suspend the rules and pass the bill, agreed to H.R. 2603 by 
voice vote. The bill was received in the Senate that same day 
and referred to the Committee on Finance.

             V. VOTE OF THE COMMITTEE IN REPORTING THE BILL

    In compliance with section 133 of the Legislative 
Reorganization Act of 1946, the committee states that S. 643 
was ordered favorably reported, with an amendment, by voice 
vote with a quorum present on July 26, 2001. Senators Gramm and 
Nickles asked to be recorded as voting nay.

                    VI. BUDGETARY IMPACT OF THE BILL

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 30, 2001.
Hon. Max Baucus,
Chairman, Committee on Finance,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 643, a bill to 
implement the agreement establishing a United States-Jordan 
Free Trade Area.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Erin 
Whitaker.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               congressional budget office cost estimate

S. 643--A bill to implement the agreement establishing a United States-
        Jordan Free Trade Area

    Summary: S. 643 would approve the agreement between the 
government of the United States and the government of the 
Hashemite Kingdom of Jordan that was entered into on October 
24, 2000. It would provide for tariff reductions and other 
changes in law related to implementation of the agreement, such 
as provisions dealing with dispute settlement and intellectual 
property rights protection. The Congressional Budget Office 
estimates that enacting the bill would reduce revenues by $2 
million in 2002, by $15 million over the 2002-2006 period, and 
by $44 million over the 2002-2011 period. Because enacting S. 
643 would affect receipts, pay-as-you-go procedures would 
apply. CBO has determined that S. 463 contains no private-
sector or intergovernmental mandates as defined in the Unfunded 
Mandates Reform Act (UMRA) and would not affect the budgets of 
state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 643 is shown in the following table.

----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal year, in millions of dollars--
                                                               -------------------------------------------------
                                                                  2002      2003      2004      2005      2006
----------------------------------------------------------------------------------------------------------------
                                               CHANGES IN REVENUES

Estimated revenues............................................        -2        -3        -3        -4        -4
----------------------------------------------------------------------------------------------------------------

Basis of estimate

            Revenues
    Under the United States-Jordan agreement, all tariffs on 
U.S. imports from Jordan would be phased out for individual 
products at varying rates according to one of nine different 
timetables ranging from immediate elimination to partial 
elimination over 10 years. One schedule would allow goods to 
enter at current rates of duty until year ten of the agreement, 
at which time such goods would enter duty-free. Based on Census 
Bureau data on imports from Jordan, CBO estimates that the 
reduction of tariff rates would reduce revenues by about $15 
million over the 2002-2006 period, net of income and payroll 
tax offsets. This estimate includes the effects of increased 
imports from Jordan that would result from the reduced prices 
of imported products in the U.S.--reflecting the lower tariff 
rates--and has been estimated based on the expected 
substitution between U.S. products and imports from Jordan. In 
addition, it is likely that some of the increase in U.S. 
imports from Jordan would displace imports from other 
countries. In the absence of specific data on the extent of 
this substitution effect, CBO assumes that an amount equal to 
one-half of the increase in U.S. imports from Jordan will 
displace imports from other countries.
            Spending subject to appropriation
    S. 643 would authorize the appropriation of $100,000 for 
the Department of Commerce to pay the United States' share of 
the costs of the dispute settlement procedures established by 
the agreement. CBO estimates that implementing this provision 
would cost the same amount, subject to the availability of 
appropriated funds.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up procedures for 
legislation affecting receipts or direct spending. The net 
changes in governmental receipts that are subject to pay-as-
you-go procedures are shown in the following table. For the 
purposes of enforcing pay-as-you-go procedures, only the 
effects in the current year, the budget year, and the 
succeeding four years are counted.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         By fiscal year, in millions of dollars--
                                                                 ---------------------------------------------------------------------------------------
                                                                   2001    2002    2003    2004    2005    2006    2007    2008    2009    2010    2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in receipts.............................................       0      -2      -2      -3      -4      -4      -5      -5      -5      -6      -9
Changes in outlays..............................................                                       Not applicable
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: The bill 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of State, 
local, or tribal governments.
    Estimate prepared by: Federal revenues: Erin Whitaker; 
Federal costs: Ken Johnson; Impact on State, local and tribal 
governments: Scott Marsters; Impact on the private sector: 
Lauren Marks.
    Estimate approved by: G. Thomas Woodward, Assistant 
Director for Tax Analysis; Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                VII. REGULATORY IMPACT AND OTHER MATTERS

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the committee states that the 
bill will not significantly regulate any individuals or 
businesses, will not affect the personal privacy of 
individuals, and will result in no significant additional 
paperwork.
    The following information is provided in accordance with 
section 423 of the Unfunded Mandates Reform Act of 1995 (Pub. 
L. No. 104-4). The committee has reviewed the provisions of S. 
643 as approved by the Committee on July 26, 2001. In 
accordance with the requirements of Pub. L. No. 104-04, the 
Committee has determined that the bill contains no 
intergovernmental mandates, as defined in the UMRA, and would 
not affect the budgets of State, local, or tribal governments.

                     VIII. CHANGES IN EXISTING LAW

    Pursuant to the requirements of paragraph 12 of rule XXVI 
of the Standing Rules of the Senate, changes in existing law 
made by the bill, S. 643, as reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

UNITED STATES CODE

           *       *       *       *       *       *       *


TITLE 19--CUSTOMS DUTIES

           *       *       *       *       *       *       *


CHAPTER 12--TRADE ACT OF 1974

           *       *       *       *       *       *       *



Subchapter II--Relief from Injury Caused by Import Competition

           *       *       *       *       *       *       *



      Part 1--Positive Adjustment by Industries Injured by Imports


SEC. 2252. INVESTIGATIONS, DETERMINATIONS, AND RECOMMENDATIONS BY 
                    COMMISSION.

    (a) Petitions and Adjustment Plans.--
          (1) * * *

           *       *       *       *       *       *       *

          (8) The procedures concerning the release of 
        confidential business information set forth in section 
        332(g) of the Tariff Act of 1930 shall apply with 
        respect to information received by the Commission in 
        the course of investigations conducted under this part 
        [and part 1], part 1 of title III of the North American 
        Free Trade Agreement Implementation Act, and title II 
        of the United Sates-Jordan Free Trade Area 
        Implementation Act. The Commission may request that 
        parties providing confidential business information 
        furnish nonconfidential summaries thereof or, if such 
        parties indicate that the information in the submission 
        cannot be summarized, the reasons why a summary cannot 
        be provided. If the Commission finds that a request for 
        confidentiality is not warranted and if the party 
        concerned is either unwilling to make the information 
        public or to authorize its disclosure in generalized or 
        summarized form, the Commission may disregard the 
        submission.

           *       *       *       *       *       *       *


                                
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